SIPP account recommendation?

Albermarle

Bostonerimus1 said:

dunstonh said:

Bostonerimus1 said:

330d said:

Ok looking to open a SIPP account and have done some research on which one to open. I'm leaning towards Vanguard as they have the lowest fees compared to others and they have good choice of the ready made portfolios to choose from.

Anything else I need to be aware of? Or any other recommendations?

Thank you 

Vanguard offers a range of multi-asset funds that contain their own funds. Is that what you mean by "ready made portfolios"? These aren't really portfolios because you can't buy and sell the individual funds inside, but they are a simple and value for money way to own a diverse set of funds.

Vanguard recently launched a robo-service.     Its not a SIPP but operates similar to other robos in that it it asks several questions and flowcharts people towards matching 1 of 5  robo portfolios of in-house funds.

Its more expensive than VLS or the IFA version of VLS:
0.30% management fee
0.15% account fee (capped to £375) 
0.16% OCF + TC 

I guess that Vanguard have added it for completeness in their overall offering but its not something any of the experienced investors here would likely use.  Its not as expensive as some robos but its not as cost effective as a SIPP with multi-asset funds.

Thanks, good to know. I had a look at the Vanguard site and it says they offer a SIPP account where they will come up with a set of investments based on the answers you give to some online questions or you can DIY.

They have a similar managed ISA as well.

Bostonerimus1

dunstonh said:

Bostonerimus1 said:

dunstonh said:

Bostonerimus1 said:

330d said:

Ok looking to open a SIPP account and have done some research on which one to open. I'm leaning towards Vanguard as they have the lowest fees compared to others and they have good choice of the ready made portfolios to choose from.

Anything else I need to be aware of? Or any other recommendations?

Thank you 

Vanguard offers a range of multi-asset funds that contain their own funds. Is that what you mean by "ready made portfolios"? These aren't really portfolios because you can't buy and sell the individual funds inside, but they are a simple and value for money way to own a diverse set of funds.

Vanguard recently launched a robo-service.     Its not a SIPP but operates similar to other robos in that it it asks several questions and flowcharts people towards matching 1 of 5  robo portfolios of in-house funds.

Its more expensive than VLS or the IFA version of VLS:
0.30% management fee
0.15% account fee (capped to £375) 
0.16% OCF + TC 

I guess that Vanguard have added it for completeness in their overall offering but its not something any of the experienced investors here would likely use.  Its not as expensive as some robos but its not as cost effective as a SIPP with multi-asset funds.

Thanks, good to know. I had a look at the Vanguard site and it says they offer a SIPP account where they will come up with a set of investments based on the answers you give to some online questions or you can DIY.

Yes, but when Vanguard use the term SIPP, it is in a marketing sense as neither the robo pension or the in-house platform pension offer typical SIPP functionality.  Their own marketing jumps between SIPP and personal pension in places.   (its not a personal pension or a stakeholder pension either - so, marketing naming takes over)

I think the OP would be interested (as am I) about the differences between the Vanguard SIPP and what you'd expect from other providers. If it is about being limited to only Vanguard funds, then that goes for anything on the Vanguard platform and I don't think it's an issue for the vast majority of people. I assume that the tax benefits are the same, but that maybe the differences are on the drawdown end of things.

Albermarle

Bostonerimus1 said:

dunstonh said:

Bostonerimus1 said:

dunstonh said:

Bostonerimus1 said:

330d said:

Ok looking to open a SIPP account and have done some research on which one to open. I'm leaning towards Vanguard as they have the lowest fees compared to others and they have good choice of the ready made portfolios to choose from.

Anything else I need to be aware of? Or any other recommendations?

Thank you 

Vanguard offers a range of multi-asset funds that contain their own funds. Is that what you mean by "ready made portfolios"? These aren't really portfolios because you can't buy and sell the individual funds inside, but they are a simple and value for money way to own a diverse set of funds.

Vanguard recently launched a robo-service.     Its not a SIPP but operates similar to other robos in that it it asks several questions and flowcharts people towards matching 1 of 5  robo portfolios of in-house funds.

Its more expensive than VLS or the IFA version of VLS:
0.30% management fee
0.15% account fee (capped to £375) 
0.16% OCF + TC 

I guess that Vanguard have added it for completeness in their overall offering but its not something any of the experienced investors here would likely use.  Its not as expensive as some robos but its not as cost effective as a SIPP with multi-asset funds.

Thanks, good to know. I had a look at the Vanguard site and it says they offer a SIPP account where they will come up with a set of investments based on the answers you give to some online questions or you can DIY.

Yes, but when Vanguard use the term SIPP, it is in a marketing sense as neither the robo pension or the in-house platform pension offer typical SIPP functionality.  Their own marketing jumps between SIPP and personal pension in places.   (its not a personal pension or a stakeholder pension either - so, marketing naming takes over)

I think the OP would be interested (as am I) about the differences between the Vanguard SIPP and what you'd expect from other providers. If it is about being limited to only Vanguard funds, then that goes for anything on the Vanguard platform and I don't think it's an issue for the vast majority of people. I assume that the tax benefits are the same, but that maybe the differences are on the drawdown end of things.

A SIPP should have available a wide range of investments from many providers. Typically thousands of choices. These could be OEIC ( mutual) funds; ETF's or investments trusts. Also the ability to buy individual shares and gilts.
A personal pension will have a restricted number of funds, often only the providers funds.
You are right in that legally/tax wise there is no real difference. 

From limited experience and from comments on here, the main SIPP providers seem to be more responsive to queries and generally seem to have better trained staff and better IT systems. Also they offer all legal withdrawal options, so are flexible in that respect.
Some ( not all) personal pension providers are a bit old fashioned with their IT, customer services and may not be fully flexible in their withdrawal options.
Vanguard and probably the robo providers like Nutmeg, sort of straddle the two. 

dunstonh

I think the OP would be interested (as am I) about the differences between the Vanguard SIPP and what you'd expect from other providers. 

The OP is not considering the Vanguard "SIPP" by the sounds of it.  They are considering the Vanguard Robo pension.  You cannot self investment in a robo pension.

You already know what a SIPP is and you already know that Vanguard's non-robo pension doesn't offer whole of market access to investments.  Indeed, it doesn't even offer all of its own fund range.

Bostonerimus1

dunstonh said:

I think the OP would be interested (as am I) about the differences between the Vanguard SIPP and what you'd expect from other providers. 

The OP is not considering the Vanguard "SIPP" by the sounds of it.  They are considering the Vanguard Robo pension.  You cannot self investment in a robo pension.

You already know what a SIPP is and you already know that Vanguard's non-robo pension doesn't offer whole of market access to investments.  Indeed, it doesn't even offer all of its own fund range.

The OP is under the impression they are considering a "SIPP" with Vanguard in their first post, so are obviously a little confused by the terminology. The differences between Vanguard's offerings and "true SIPPs" are obviously important and somewhat glossed over by Vanguard so clarification will help the OP,  and me as well.

From reading the Vanguard site in a bit more detail I don't like the robo Personal Pension because it's so opaque, but I'm a DIY guy so not knowing the funds makes me break out in hives. The better (and less expensive) option IMO would be the self managed pension, although I probably wouldn't use the Target Retirement funds because I don't like the way they change the asset allocations and I'd go for a simple lazy index fund portfolio or a multi-asset fund like VLS80.

330d

Thanks for all the replies. Apologies if I've used the wrong terminology earlier and confused things.

It's the Vanguard lifestrategy funds im looking at choosing. Not sure on which risk factor yet but will be one of them.

https://www.vanguardinvestor.co.uk/what-we-offer/all-products

ComicGeek

330d said:

Thanks for all the replies. Apologies if I've used the wrong terminology earlier and confused things.

It's the Vanguard lifestrategy funds im looking at choosing. Not sure on which risk factor yet but will be one of them.

https://www.vanguardinvestor.co.uk/what-we-offer/all-products

I've been doing a lot of research into the different Vanguard multi asset funds and these lifestrategy funds. The UK % seems to be very high for these lifestrategy funds, and their fund objective seems to be that "the UK will generally form one of the largest single country exposures for shares and bonds" - not sure why they would choose that, as I don't believe that the UK market is going to outperform the rest of the world, you might have a different opinion. Just something to consider when looking at their ready made portfolios.

I'm also realising that company contributions are also difficult for some of these low cost platforms. Vanguard aren't a workplace scheme so employers can't make contributions to personal pensions. As a registered director of my company I can make one-off payments via debit card (which I don't have at the moment), but can't make BACs payments from the company or regular direct debits. 

Fidelity will set up regular payments from my company without any issue, but annual fees are slightly higher and I would need to look at funds again in more detail.

What I'm realising is there is no perfect solution and always some compromise.

dunstonh

I've been doing a lot of research into the different Vanguard multi asset funds and these lifestrategy funds. The UK % seems to be very high for these lifestrategy funds, and their fund objective seems to be that "the UK will generally form one of the largest single country exposures for shares and bonds" - not sure why they would choose that, as I don't believe that the UK market is going to outperform the rest of the world, you might have a different opinion. Just something to consider when looking at their ready made portfolios.

Many consider the level of home bias in the VLS OEIC range to be a limitation that doesn't appeal to them.   Vanguard offer IFAs two version (with or without home bias) but they don't offer the DIY market the one without home bias.

The home bias has certainly held back performance over the last decade.  Although looking forward, the UK is considered undervalued by many.  So, it could be that home bias becomes a good thing.

I'm also realising that company contributions are also difficult for some of these low cost platforms. Vanguard aren't a workplace scheme so employers can't make contributions to personal pensions. As a registered director of my company I can make one-off payments via debit card (which I don't have at the moment), but can't make BACs payments from the company or regular direct debits. 

Most individual pensions will accept company contributions but some of the newer or smaller ones won't.  As a director of "own company", company contributions are vital.  Hwoever, you do not need a workplace pension.

Fidelity will set up regular payments from my company without any issue, but annual fees are slightly higher and I would need to look at funds again in more detail.

Fidelity is whole of market.  So, that shouldn't be an issue.     Plus, avoiding a restricted offering like Vanguard means you have more choice (including multi-asset funds without home bias and lower cost than VLS) but if you wanted to stick with Vanguard for some reason, then you can do that with Fidelity.

What I'm realising is there is no perfect solution and always some compromise.

I would largely agree with that. 

Bostonerimus1

If you don't like the home equity bias of the Life Strategy range you could add a global equity index fund to reduce the overall UK component in your portfolio.

Random47

330d said:

Thanks for all the replies. Apologies if I've used the wrong terminology earlier and confused things.

It's the Vanguard lifestrategy funds im looking at choosing. Not sure on which risk factor yet but will be one of them.

https://www.vanguardinvestor.co.uk/what-we-offer/all-products

I have used the VLS funds for about 5 years now. Have a mix of 60,80,100 equity. The 100% equity has provided best return individually, but as a whole the stated rate of return of 31%. 

That said I am transferring to Hardgreves Landown shortly just as they seem to be easiest to deal with when looking at small pot £10K release arrangement.